China Mobile to Start Homegrown 4G in Hong Kong as Demonstration

Dec. 17 (Bloomberg) -- China Mobile Ltd. will start
commercial service with its homegrown, fourth-generation network
in Hong Kong this month as the world’s largest mobile-phone
company by subscribers moves closer to a nationwide roll out.

The carrier will add services in the city with the 4G
standard it backs called TD-LTE, to high-speed operations it
began locally in April using an alternative global 4G standard,
Cynthia Chan, a spokeswoman for China Mobile Hong Kong, said in
a Dec. 14 phone interview.

China Mobile Chief Executive Officer Li Yue is betting the
move to faster data networks can help reverse a trend of
decelerating revenue. Sales growth will probably slow to about 6
percent this year from almost 9 percent in 2011, according to
data compiled by Bloomberg. Starting the TD-LTE service in Hong
Kong is “very clever positioning” that should help the company
win government approval for the rest of China, said HSBC
Holdings Plc analyst Tucker Grinnan.

“The China Mobile Hong Kong launch is really designed to
support the TD launch in China, develop the skill and show the
Chinese government TD is commercially viable,” said Grinnan.
“By deploying a convergent network in Hong Kong, China Mobile
is providing a real-world demo,” said the Hong Kong-based
analyst, who rates the stock overweight.

The dual network provides users better roaming coverage,
while reducing installation and maintenance costs for carriers,
Grinnan said. China Mobile will be the first carrier in Asia
offering such a dual-mode network, Chan said in an e-mail.

Dual Network

The Beijing-based company will provide details of the new
service at a conference tomorrow featuring Tiger Lin, chairman
of the Hong Kong unit, and Sean Lee, chief executive officer for
the local division, according to the e-mail.

Frequency Division Duplex, or FDD, and Time Division
Duplex, or TDD, are the two primary methods of delivering the 4G
service based on Long Term Evolution, or LTE, technology.

China Mobile’s Hong Kong unit in 2009 had won a bid for
2600-megahertz spectrum that allowed the carrier to offer FDD
service, which began in April. In February, the carrier won a
second band of spectrum from 2330-megahertz to 2360-megahertz,
which allows the provision of TDD service.

China Mobile’s state-owned parent is still conducting
trials of the 4G TD-LTE service and has yet to receive
regulatory approval for nationwide commercial service. The TD-LTE 4G trial in the rest of China will be expanded to 20,000
base stations in 13 cities in the second half of this year, from
seven cities in the first six months, the company said in
August. Next year, the carrier plans to expand the trial to
200,000 4G base stations.

Data Traffic

In the first nine months of 2012, data traffic over the
carrier’s wireless networks surged 61 percent from a year
earlier to 626 billion megabytes, China Mobile said in October.
The increase was driven by services including downloads of
videos and e-books, the company said at the time.

The Hong Kong demonstration of the 4G TD-LTE network is the
latest example of the carrier using the city as a test bed. This
month China Mobile also announced it started a mobile television
service in Hong Kong. The service has both free and paid
channels that can run on tablets and smartphones with Google
Inc.’s Android system, and also works on Apple Inc.’s iPhone
using a plug-in receiver called a dongle.